PACRA Maintains Instrument Rating of Pakistan Services Limited | Sukuk | Mar-18

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PACRA Maintains Instrument Rating of Pakistan Services Limited | Sukuk | Mar-18

November 19, 2018

Lahore, November 19, 2018 (PPI-OT): Ratings reflect Pakistan Services Limited’s (The Company) strong position in the hospitality industry as the market leader drawing comfort from the Company’s association with Hashoo Group. Pakistan Services Limited has witnessed growth over the years (in line with Industry dynamics) amid improving security conditions and progression of CPEC with stable margins. However, on going political scenario impacted the Company’s profitability and coverages negatively during 3MFY19.

The Company has modest leveraging. Relatively higher borrowings and rising interest rates have put coverages under pressure. This trend is expected to continue till cashflows from new properties start flowing in. The Company has sufficient liquid investments and cash to meet its obligations during FY19. Going forward, the Company is taking cost control measures to improve margins and is making sizable investments in development of new properties which are expected to augment its revenues.

Ratings are dependent on effective implementation of envisaged strategy while maintaining modest leveraging and improving coverages. Any significant delay in commencement of new projects, deterioration in margins/coverages and material dilution in liquid investments (other than debt repayment) will have a negatively impact on ratings.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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